Taking Your Idea into a Business
A reader of this column asked me this week “what should I do to prepare myself for a mentoring session? I have this idea, but now what?” That is a super question! In business as in life, you should always crawl before you walk and walk before you run. And so it goes when developing the idea for your new startup. You owe it to your future business to think through some valuable pieces of the process.
In the early stages of your business’s development, you’ll hear from plenty of experts and prognosticators who will emphasize the need to create a sound, airtight business plan. While it’s true that a business plan is an important tool for defining your strategy, detailing deliverables for stakeholders and developing cashflow forecasts for investors, it’s important to first crystallize the idea behind the business by putting together what our SCORE CEO calls a “business concept statement”. Bridget Weston is the Acting CEO of the SCORE Association, where she provides executive leadership and works directly and collaboratively with the Board of Directors to establish the vision and direction of SCORE. I will share some of her ideas about this valuable exercise.
Think of your Business Concept Statement as a tool that distills your voluminous business plan into a handy one- or two-page document. Not only does it lay the groundwork for the business plan to come, it also refines your idea, outlines the consumer problem it aims to solve, and discusses how the idea will fit into the overall market. It’s a snackable snapshot you can share with investors, lenders, and/or future partners.
What Should a Business Concept Statement Include?
While brevity is the hallmark of a solid Business Concepts Statement, it should still encompass some key elements and provide a thoughtful analysis of your idea, a glimpse of the existing market, and a value proposition that distinguishes you from the rest of the market.
- A Brief Description of the Business Concept. This doesn’t have to be more than a sentence or two that captures the essence of your product or service.
- The Market Need. Identify the void in the marketplace that your business idea is going to fill. This could be a problem your product or service will solve, an emerging market your product will help to define, or the absence of a product or service that people don’t even know they need.
- Your Solution. This is a more in-depth discussion of how your business idea is going to fill the void, solve the problem, or create a new market. It’s also your chance to discuss why your product or service is the answer and, more specifically, why YOU are the perfect person to bring the idea to market.
- Your Proposed Business Model. This is a critical component for every stakeholder involved because this is the element of the Business Concept Statement that details how you are going to make money. You’ll want to discuss how you’re going to charge for your product or service, the business processes you plan to implement, and the resources you’ll need to make it a success.
- Your Unique Value Proposition (UVP). Explain how your product or service is different from others in the marketplace. Identify why someone would want to buy your product instead of one that’s already on the market. Your UVP is your differentiator—the reason your business will exist. Will it be your unparalleled customer service? A new technology? A higher-quality product? Better price points? Faster delivery? Or a combination of those things? Even something as simple as more attractive packaging can make all the difference for many consumers.
- A Succinct Competitive Analysis. To be absolutely sure your new business idea will fill a hole in the market, you’ll need to look at your potential competition. Who else is currently providing products or services to your prospective customers? What are their strengths and weaknesses? Examine the competition’s annual revenue (or estimate it if you have to) and identify their market share. This will help you determine both the size of the market and its potential for disruption, innovation, or new products or services.
- A Quick Overview of Your Marketing Plan. How you market your business will be critical to its success. In some cases, your marketing plan may actually be your UVP. Establish buyer personas, develop a target audience, and assess and prioritize your ideal marketing verticals. Then, discuss how you plan to promote your business idea in a way that’s different from your competitors.
Once you’ve finished developing your Business Concept Statement, you’ll have a useful tool to pursue business partners, investors, lenders, advisors, mentors, peers and even future employees.
One important endnote: make sure your Business Concept Statement isn’t a sales pitch! Stakeholders aren’t looking for catchy slogans, guarantees or pushy sales copy. They want to see a well-thought-out business idea that’s supported by an actionable analysis of the existing market.
If you’re thinking about bringing a new business idea to market, but aren’t sure where to start, reach out to a SCORE mentor, who can help guide you through the process of developing a compelling Business Concept Statement
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